1935 (1) TMI 22 - HC - Income Tax

Court Rules Service of Income Tax Notices Ineffective Due to Failure to Reach Designated Manager.

Commissioner of Income Tax, Burma Versus Dey Brothers

The court found that the notices issued under Sections 22(2) and 23(4) of the Income Tax Act were not effectively served on the assessee as they did not ... - Issues:Determining compliance with notice requirements under Sections 22(2) and 23(4) of the Income Tax Act.Analysis:The case involved assessing whether the notices issued under Sections 22(2) and 23(4) of the Income Tax Act were effectively served on the assessee. The primary issue was whether the notices reached the designated person in accordance with the prescribed methods of service. The Commissioner of Income Tax contended that as long as the notice reached the intended recipient, it constituted sufficient compliance. However, the court emphasized that the notice must be served either by post or in accordance with the Code of Civil Procedure. The court referred to Order V, Rules 9 and 13, which dictate the proper procedures for service of summonses. It was established that the manager, S.M. Dutta, was the authorized agent empowered to accept service on behalf of the assessee.The court scrutinized the circumstances of the case, noting that the summonses were delivered to an assistant in the shop, not the designated manager, S.M. Dutta. While the employees in the shop were accustomed to accepting communications on behalf of the firm, there was no evidence to suggest that S.M. Dutta had personal knowledge of the delivery of the notices. The court highlighted that mere delivery to a clerk or servant, who then hands it over to the manager, does not constitute proper service under the specified rules. The court rejected the notion that such indirect delivery could be construed as effective service on the manager. Consequently, the court concluded that there was insufficient evidence to establish that S.M. Dutta was served with the summonses, leading to a negative response to the question posed. The court ordered the refund of a certain amount but made no ruling on costs.The judgment was a unanimous decision, with all judges concurring that the question should be answered in the negative. The court's analysis focused on the specific requirements for serving notices under the Income Tax Act and the importance of adhering to the prescribed methods outlined in the Code of Civil Procedure. The judgment underscored the necessity for direct service on the designated individual and rejected the notion that indirect delivery to an employee could suffice as proper service.